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Weekly Market Commentary
September 21, 2015
The Markets
As Tom Petty often sang, "The waiting is the hardest part."
Whether it's waiting for college acceptance letters, medical test results, employment offers, or Federal Reserve monetary policy changes,
waiting can produce a lot of anxiety. A 2012 research paper written by Associate Professor Kate Sweeney and Graduate Fellow Sara Andrews
of the University of California, Riverside, explained it like this:
"...Although waiting for inevitable events such as the arrival of a bus or one's turn in line may be irritating...the combination of uncertainty
about the outcome and waiting for that outcome can be particularly excruciating. In fact, waiting may be more anxiety provoking than
actually facing the worst case scenario..."
That may go a ways toward explaining why markets didn't rally when the Federal Reserve decided to leave rates unchanged last week. The
Federal Open Market Committee's statement indicated they were concerned, "Recent global economic and financial developments may restrain
economic activity somewhat and are likely to put further downward pressure on inflation in the near term."
On the face of it, continued low rates should have been good news for assets like stocks, according to Barron's. However, any positive aspects
to the news were mitigated by the fact everyone expects the Fed to begin raising rates soon. Investors are waiting for it to happen, and they're
uncertain how economies and markets will react when it does.
Heightened anxiety may be one of the reasons investors responded the way they did last week. On Friday, after mulling the Fed's decision,
national stock market indices around the world - in the United States, England, Germany, France, and Japan - fell significantly, according to
Yahoo! Finance.
Now, we're back to waiting.
If anxiety remains high, markets may be volatile.
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-,
and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are
annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron's,
djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into
directly. N/A means not applicable.
IT'S OFFICIAL. THE IGS ARE IN. Ignoble is a word rarely heard in everyday conversation. Merriam-Webster defines it as meaning, "of low birth
or common origin, or characterized by baseness, lowness, or meanness."
The 25th First Annual Ig® Nobel Prize Ceremony was held last week at Harvard University. Improbable.com reported, "Winners traveled to the
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ceremony, at their own expense, from around the world to receive their prizes from a group of genuine, genuinely bemused Nobel Laureates..."
Winners completed research that made people laugh and then caused them to think.
The Management Prize went to Gennaro Bernile, Vineet Bhagwat, and P. Raghavendra Rau, authors of 'What Doesn't Kill You Will
Only Make You More Risk-Loving: Early-Life Disasters and CEO Behavior.' They examined the link between CEOs' early-life exposure to
major fatal disasters and the financial and investment policies adopted by their companies. They found, "CEOs who experience fatal
disasters without extremely negative consequences lead firms that behave more aggressively, whereas CEOs who witness the extreme
downside of disasters behave more conservatively."
The Economics Prize was awarded to the Bangkok Metropolitan Police, which implemented a new policy in an effort to reduce bribery.
They pay a bonus to police officers who refuse to accept bribes, even though the officers are required by law not to accept bribes. (It's a
concept that may resonate with parents.)
The Literature Prize went to Mark Dingemanse, Francisco Torreira, and Nick J. Enfield, who presented evidence and arguments
supporting the idea that 'huh?' is a word, and that it "is found in roughly the same form and function in spoken languages across the
globe."
If you're interested in learning about the ignoble undertakings of other winners (who documented chicken walking like dinosaurs, created bee
sting pain indices, and completed other thought-provoking experiments), visit www.Improbable.com.
Weekly Focus -- Think About It
"A day without sunshine is like, you know, night."
--Steve Martin, American comedian
Best regards,
Yerba Buena Financial Partners
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to
this e-mail with their e-mail address and we will ask for their permission to be added.
Sources:
http://www.metrolyrics.com/the-waiting-lyrics-tom-petty.html
http://www.katesweeny.com/uploads/2/6/9/4/26944848/sweeny__andrews_2014_jpsp.pdf (or go to
http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/09-21-15_AmerPsychologicalAssnMapping_Individual_Differences_in_the_Experience_of_a_Waiting_Period-Footnote_2.pdf)
http://www.federalreserve.gov/newsevents/press/monetary/20150917a.htm
http://www.barrons.com/articles/for-markets-its-the-treacherous-season-1442637816?mod=BOL_hp_we_columns (or go to
http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/09-21-15_Barrons-For_Markets_Its_the_Treacherous_SeasonFootnote_4.pdf)
http://www.marketwatch.com/story/wall-st-cant-be-more-in-doubt-about-feds-interest-rate-game-plan-2015-09-15
http://finance.yahoo.com/;_ylt=AhD.Uke2qEIR0jVXyNZxv5d.FJF4 (or go to
http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/09-21-15_YahooFinance-National_Stock_Market_IndicesFootnote_6.pdf)
http://www.merriam-webster.com/dictionary/ignoble
http://www.improbable.com/ig/2015/
http://www.improbable.com/ig/winners/
http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2423044
http://www.thaivisa.com/forum/topic/767304-bangkok-police-defend-anti-bribery-cash-reward/
http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0078273
http://www.brainyquote.com/quotes/quotes/s/stevemarti378299.html#R7tyxPhhiObb2eLB.99
NEW YBFP Blog Post:
Actions are the difference
A voice for those whose voice was taken away
Bruce shares a recent experience from his trip to Washington DC regarding his belief in our
inherent obligation to our community to get out of our comfort zone, speak out and take
action to protect and defend those less fortunate or those being oppressed by anti-social
elements.
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*The Standard& Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
*The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available
prices.
*The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S Government is seen as a risk-free borrower, investors use
the 10-year Treasury note as a benchmark for the long-term bond market.
*Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.
*The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures
contracts on 19 physical commodities and was launched on July 14, 1998.
*The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as
calculated by Dow Jones.
*Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
*Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
*Consult your financial professional before making any investment decision.
*This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer
*Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. The opinions voiced in this material are for
general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for
you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may
not be invested into directly.
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